Good and bad News about Bitcoin

Category Archives: BitConnect

BitConnect was a high-yield cryptocurrency investment ponzi scheme that collapsed in January 2018, and now YouTube is being sued for alleged negligence in propagating BitConnect content. Apparently, YouTube published over 70,000 hours of unedited BitConnect connect, generating 58 million views, possibly resulting in hundreds of thousands of victims.

The founder of the Silver Miller law firm which has launched the class action Bitconnect lawsuit, David Silver, says, “The platform allowed BitConnect to reach hundreds of thousands of potential investors, all while YouTube was aware that BitConnect was a scam. As the old saying goes: Sometimes when you lie down with dogs, you get fleas.”

BitConnect promised daily interest earnings for cryptocurrency invested on their site, up to 40% per month, with an additional interest rate of 0.25% daily for people that invested over USD 10,000. BitConnect had a native cryptocurrency, BCC, that had a market cap of USD 2.5 billion at the peak of the scheme.

BitConnect announced that it was closing up due to negative reports by the media and said it would repay all loans with BCC. They did this maliciously, since they waited to repay loans until after the announcement. In January 2018 BCC lost over 99% of its value, as victims scrambled to sell their coins, and BitConnect was able to repay all loans for a miniscule fraction of the real loan value. BCC is effectively dead at this point with daily trading volume of USD 100. This might be the most catastrophic and complete collapse of a cryptocurrency in history, having gone from a market cap of USD 2.5 billion to virtual death in less than six months.

The BitConnect scandal may be part of the reason that YouTube’s parent company, Google, banned all cryptocurrency advertisements. However, this ban does not affect content being posted on YouTube.

It remains up to the court to decide if YouTube is actually responsible for people being victimized by content in videos posted on their platform. A tremendous amount of videos are posted on YouTube every day, and it would be quite difficult for YouTube to look through all the videos and delete ones related to cryptocurrency scams. Additionally, it can be argued that people need to be responsible for their own investment decisions.

Turcoin, hailed once as Turkey’s new alternative digital token and potential national cryptocurrency has been denounced as a Ponzi scheme, writes Bitcoin Exchange Guide.

It appears that the founders have disappeared, apparently accused of fleeing Turkey, absconding with more than 100 million Turkish liras (about USD 20 million) collected from over 10,000 people in in the country.

The company had gained plenty of publicity since its startup including laying on massive parties for celebrity guests and awarding luxury vehicles to early adopters of Turcoin, late in 2017. Since then, it’s been reported that the cars were borrowed rather than owned by the company.

The Ponzi scheme ran for nine months before it was uncovered, duping customers with promises that it was to become Turkey’s national cryptocurrency, despite lacking any acknowledgement of that from government officials at any time.

The company originated out of Hipper, an Istanbul-based company founded by Muhammed Satıroğlu and Sadun Kaya, who are now both finger pointing at each other, neither claiming to be the perpetrator of any wrongdoing.

Satıroğlu, who owns 49% of Hipper, has claimed that he was simply a mediator and that the company holds no funds in its accounts. Kaya, with his 51% holding, has vanished, although the company is promising to return funds once its accounts are frozen; difficult considering Satıroğlu is claiming the company has no extra funds banked and that the funds are in Kaya’s account in Cyprus.

Cryptocurrency users should be aware of Ponzi schemes, many of which insist that customers lock up their funds for what would be regarded as an unreasonable amount of time. Bitconnect, which was recently outed as a Ponzi scheme last year by investors, including Ethereum founder Vitalik Buterin, is a case in point. Ponzi schemes often leverage the popularity of bitcoin and cryptocurrencies to promise impossibly high and regular returns. The Bitconnect example promised 40% return on investment each month, providing investors locked up their capital on its platform, writes BTC manager.

Three months ago, 48-year-old Madeline Biggaton’s last message to her husband was simply “feed the dog” before driving away from her home in the south of Sydney. After dropping off her daughter at a friend’s she parked her car 24 km south of the city in Kurnell and hasn’t been seen since.

The missing woman’s husband is John Biggaton, Australian director of crypto exchange Bitconnect which has since shut down. Months after Bitconnect’s price reached AUD 620, the company was forced to shut down its operations. Its website cited cease and desist letters from Texas and North Carolina as the reason for its sudden closure in January of this year. It also cited ongoing “bad press” as another reason for shutting down.

Bitconnect has been suspected of being a Ponzi scheme because of its multilevel marketing structure and for various other reasons. The Bitconnect Coin was among the world’s top 20 most successful cryptocurrency tokens until its price plunged 65% starting 3 January 2018.

It is reported that Mrs Biggaton, who held a senior position with a pharmaceutical company, was in a “dark place” in the days leading up to her disappearance and left two wedding rings in the car which was later discovered by local police.

As the car was parked near cliffs at Kurnell with the keys in it, police assumed that she had jumped off, but after an extensive search with rescue helicopters, Marine Area Command and the Dog Unit involved, her body wasn’t found.

Family and friends held a memorial for her in early May despite not knowing what happened to her. A friend said:

“She was just so loved, the church was completely packed out… It’s just so not like Madeline. She was brought up in cotton wool, she was one of those real sort of good girls who never put a foot wrong her whole life… We hope she’s out there somewhere, but we are all just trying to connect all the dots together to work out what happened.”

Police are hoping to speak to two men “of Indian appearance” who reportedly picked up Mrs Biggaton’s car keys the day after she went missing.

A former Indian legislator has been found a “proclaimed offender” by the local court presiding over a USD 1.3 million Bitcoin extortion case.

As reported by The Indian Express, former member of Legislative Assembly Nalin Kotadiya failed to show up in court regarding the case, despite multiple summonses. The Indian Criminal Investigation Department (CID) was not able to serve him an arrest warrant.

The sessions court Monday in Ahmedabad approved the CID’s application to register Kotadiya as an absconder from justice, meaning any resident can make his arrest and he is not at liberty to leave India.

An arrest warrant has also been issued for Jatin Patel, who has been declared a co-conspirator.

The case

Kotadiya became a person of interest earlier this year in the CID’s investigation that saw businessman Shailash Bhatt accuse a group of policeman extorting approximately USD 1.7 million in Bitcoin in February. New reporting indicates that Kotadiya stands accused of assisting in the police officers’ kidnap of Bhatt.

The case has an additional twist, as the victim Bhatt also faces his own accusations of extortion. He and an associate Kirit Paladiya face charges of extorting a member of BitConnect at gunpoint for around USD 22 million in cash and Bitcoin.

A report from the Hindustan Times cites Bhatt as an investor of BitConnect, which was shut down in India in January due to allegations of being a Bitcoin Ponzi scheme. The article describes the extortion as Bhatt’s plot to recover his investment.

Seven constables of the Amreli district police that are allegedly involved in the case are currently reported to be on the run.